Tag: lg display

The e-reader and tablet wars are largely benefiting one company, for now – LG Display.

Thanks to a range of high profile contracts, with Amazon, Apple and Barnes & Noble all customers, LG Display has shot to the top of the media tablet display charts. It is winning by far over nearest rival Samsung, holding 51 percent of global unit shipments in the second quarter of 2011.

Other Apple contractors include Samsung – which is second with a 35 percent hsare – and Chimei Innolux which has a nine percent share. The rest is made up of other smaller vendors.

Senior manager of small and medium displays at IHS, which carried out the research, Vinita Jakhanwal says despite their very different offerings, Apple, Amazon and Barnes & Noble have one thing in common – that they depend on LG Display’s advanced in-plane switching (IPS) displays.

The company formerly known as Lucky Goldstar’s IPS has faster response speeds, wide viewing angles up to 179 degree and no after image, while consuming 30 percent less power overall than regular LCD displays.

LG quickly saw there was a buck to be made in media display tablets and has given more capacity than rivals. Being Apple’s main supplier hasn’t hurt either, so it’s no wonder it has trounced the competition in this segment.

LG’s IPS, though, will face challenges in the near future – primarily from Sharp, which has concocted an oxide material of indium, gallium and zinc called IGZO which supports electron mobility up to 30 times faster than amorphouse silicon. Production is expected to start this year.

There will be plenty of opportunity for companies like LG to profit. Media tablets are the main drivers for small and medium sized displays, while sales for the devices have remained attractive while other segments have stalled.

Shipments of media tablets are expected to keep a compound annual growth rate of 45 percent from 2011 up to 2015, according to IHS figures.

Now the companies will spin off their panel businesses to create Japan Display K.K. by early next year according to Bloomberg.

Innovation Network Corp of Japan, an organisation backed by the government, will account for 70 percent of the new venture having thrown $2.6 billion into the kitty. Sony, Toshiba and Hitachi will share the remaining 30 percent.

It is expected that the venture will create the largest manufacturer of small scale such as that for smarthphones or and tablets.

And with the LCD TV market in a replacement cyclei in developed nations, and PC sales floundering, it seems that the small screen market is a safer bet for the largely public owned company.

New production lines will now come on line using INCJ cash, with external managers expected to arrive. The three firms will also appoint directors to the board.

Meanwhile another Japanese firm in the panel business, Sharp, which is to see investment from Apple, is expecting to see its own profits shoot up as it capitalises on the boom in smaller screens.

Sony is expected to focus more on its sensor business for digital cameras and smartphones after spinning off its small panel business. This will involve double its spending on capacity.

LG Display has announced a significant drop in its spending for next year to make up for dwindling demand for flat screen TVs and PCs.

The Korean panel maker said that it will only be splashing out $2.8 billion in 2012, meaning a 33 percent drop from its original budget for the year. The announcement comes not so long after it was announced that this year’s expenditure would also be cut.

This means 2012 will see the lowest budget since the midst of the global recession, when$2.6 billion was spent.

It is thought that the drop in spending is due to demand for TVs and PCs dropping rapidly recently.

With many developed markets having already seen massive take up of large flatscreens it has been difficult to push new sets. Valiant efforts to persuade the public they need 3D sets for example have of course been made, but demand is still down.

The PC market has also been stagnating of late. As tablets continue to increase in popularity there has been a drop in popularity, with HP deciding to ditch its PC arm recently.

This has meant that LG Display’s panel market rival Samsung has also declared plans to lower spending, with no plans for an LCD factories next year.

The outlook for the rest of the year now looks poor, the Wall Street Journal writes, even throughout the usual boom of the holiday shopping season.

LG Display CFO James Jeong said that he doesn’t expect demand will ramp up until at least the early part of next year. With this in mind the firm will lower production right through to July in order to reduce inventories at normal levels, also keeping prices high presumably.

According to Displaysearch panel expert Paul Gray there are a variety of factors that have conspired to leave the panel in an unfavourable position.

“One of the reasons is that in developed markets people have already upgraded to LCD screens from CRT, and have reached the maximum size of screens that is acceptable,” he told TechEye.

“The market is now moving to other areas such as South America and there is less money available to be spent there. In developed markets people are less interested in upgrading to ever bigger screen sizes too.

“So many in the panel industry are now wondering why they would be borrowing money for extra capacity when the market is changing.”

Attempts to entice customers with new features have often fallen flat despite attempts to ram features like 3D down consumer’s necks.

“The industry is looking for a way to shorten the replacement cycle now that the market has matured. But they haven’t found it.

“Ramming 3D into the market where there is little content other than big blockbusters has not worked. Now there is an attempt to popularise the hardware – Samsung has released a 3D TV for under $500 – but there is little interest from the public.

“In this sense there has been a failure to excite the public with new technologies, and a failure to find something which the public actually want rather than just a shiny new feature.”

According to Gray the industry will continue to face some long term problems with over capacity as China does not look set to halt its own expansion into the panel industry.

“China is trying to develop its own LCD panel industry and it is giving extremely favourable lending prices to firms in its domestic industry. This means that China could increase capacity regardless of supply and demand.

“This then leads to a strategic dilemma for others in the market such as the Korean firms. If you don’t invest in overcapacity then you are out of the market, but if you do, you are cutting your own throat with debt.”

AMOLED displays have received a boost from Samsung’s 5.5G fab, sparking expectations for substantial fab growth in the next few years.

But as the technology grows in popularity rival firms will have some catching up to do if they are going to offer an alternate supply to the Korean giant.

Currently Samsung has a stranglehold on the display technology which could give LCD a run for its money if it can gain popularity.

Following the ramping up of Samsung Mobile Display’s 5.5G fab there are expectations that it will reach its maximum capacity of 80,000 substrates per month by the end of the first quarter in 2012, says a DisplaySearchreport.

This increase in capacity is, in turn, expected to drive further growth of AMOLED capacity from 890,000 m2 this year to 2.6 million m2 next year. Capacity is then forecast to double again in the following year.

Though there have been announcements from LG Display for forthcoming large screen AMOLED, Samsung currently accounts for nearly all commercial shipments. Furthermore there are likely to be further expansions in the future with as interest in the display type increases.

This means that the firm, which has been selling bucketloads of its Galaxy SII handsets with AMOLED display, is likely to stay at the forefront of the market. Bad news for rivals if they don’t want to rely on a competitor for a supply of the displays.

Apparently there are plans for other companies to begin commercial production of AMOLED displays. AUO, LG Display and Chimei Innolux all expected to bring AMOLED fabs to pilot mass production in the next couple of years, and others are said to be looking at entering the market.

Though most are looking at AMOLED displays for small or medium display production, such as for smartphones and tablets, there are plans to move towards 8G plants for large screen next year.

And with LCD panel makers notching up net profit losses for four quarters in a row, AMOLED displays will be a “bright spot” for the flat panel display market.

This means that the burgeoning technology could finally start to make more of an impact on LCD sales as prices come down and it stops being a niche product.

But as display analysts Meko have told us, Samsung is so far ahead of the competition there is a danger of edging others out of the market.

So if others can challenge a Samsung monopoly it could be good news for customers.

If not then it could be that Samsung can withhold tight control over the market, which would be bad news for consumers while others struggle to catch up.

According to Goksen Sertler at Meko Samsung would benefit.

“Obviously if one company has monopoly in a technology this is a good opportunity to keep profit margins high,” Sertler told us.

“This would mean relatively higher street prices for end users. However when other players arrive they would cut costs of panels and street prices would then ease.”

This will be eased by other firms in Korea and in China starting trial production, though there is a long way to catch up with Samsung.

“Other companies have already started their pilot production or even some mass production.There are some firms which have already invested in OLED technology. Back in February 2011, LG Display was reported to have started AMOLED panel production at its 4.5G plant,” Sertler said.

“Clearly Korean panel manufacturers are ahead of the game in OLED production. AUO originally had announced it will complete work on its first OLED mass production line in the first half of 2011. However it was forced to delay AMOLED production at its 3.5 G plant due to technical difficulties.

“These are only a few of the players are in the AMOLED production and they will start to mass production eventually.”

Sertler continued: “AMOLED investment is dramatically important especially for non-Chinese panel makers. LCD panel business have started to swing towards China and away from Korea. Therefore Korean makers have to find new technology to stay ahead in the business.”

It’s not like panel-makers have been accused of conspiring against the whole world and its dog before. Taiwan’s AU Optronics and Chimei Innolux panel powerhouses are putting the squeeze on TFT-LCDs.

It’s a rather old trick. Tighten the belt on output and you can keep prices high. AUO is leading the charge but other big business panel companies like Samsung and LG Display are also planning to cut production.

There has been a glut of inventory with shipments particularly cautious in the Europe and North America regions, which forced panel prices to sit in the lower end of the spectrum in June. Cutting supply is a counter strategy, says Taiwan Economic News.

AUO has cut glass purchase and will lower its capacity utilisation to 80 percent from 85 percent.

We’ll see that change in the third quarter. Chimei is expected to knock ten percent off its capacity, from 90 to 80 percent in the same quarter. Both Samsung and LG will follow suit.

We will be taking market conditions into account, says AUO, meaning despite the overall health of the sector it’s not quite seeing the margins it would like.

It is thought China, which is making a habit of leapfrogging the US recently in terms of supercomputers or as a superpower, will retain its top position in the market this year with an 18 percent increase year on year to 46 million units in 2011.

These top six Chinese TV makers, Changhong, Haier, Hisense, Konka, Skyworth and TCL, also now account for 15 percent of global shipments, showing the increasing dominance in the global LCD TV segment.

In terms of TFT panel suppliers, CMI held the largest share with 32 percent, with LG Display increasing its share to 21 percent following a two percent increase.

Meanwhile Korean Samsung fared worse, with a drop of five percent year on year giving the firm 18 percent share and leaving it in third place.

There was an increase in the supply from Taiwan based panel makers for the top six Chinese LCD TV makers, up five percent to 52 percent.

This signified a shift away from the Korean market which saw a three percent drop down to 39 percent.

In terms of types of TFT LCD panels being used LCD cells without Backlight Units (BLUs) accounted for 26 percent of the market, while a marked increase in popularity of LED BLUs was noted with a rise from just one percent in 2009 to 11 percent the following year.

According to Ricky Park, senior analyst at Displaybank, in the past there has been a combination in LCD panels of BLU and LCD cells, but a recent trend has seen Chinese TV manufacturers working directly “on the module which increases sourcing type of only purchasing LCD cell”.

Of the LCD cells used in displays in 2010 Taiwanese firms accounted for 46 percent, while Korean firms were responsible for 2 percent.

Shipments of TFT LCD panels with 3D capabilities to the Chinese brands sat at only 30,000 units.

However, aggressive promotion of 3D TV in China this year is expected to drive sales to a sharp rise as the market increases over 2011.

Panel sourcing share of top six Chinese TV brands by country in 2010:

Panel supply type towards top six Chinese TV brands by country in 2010

LG Display is investing 250 billion won, or US $221 million, into a Seoul factory to expand on its output capacity of organic electroluminescent (OEL) panels.

The investment keeps LG en route for its target of 8,000 units per month by the end of the year. The OEL output line will accommodate 4.5 generation glass substrates, reports Nikkei (subscription).

While LG’s electronics output may be suffering, LG Display is still a huge player in the panels market only just behind Samsung. Together, Samsung and LG flog almost half of the world’s panels. Samsung is currently top dog in OELs but LG has other ideas. It wants to bring another manufacturing line to life around April next year, which should boost monthly capacity almost half to 12,000 units.

It’s a far way off from Samsung’s 70 percent OEL market dominance. Samsung has been producing OELs for years now – developing a 0.25mm panel back in mid-2007, and has plans to increase pproduction output as much as ten-fold with a new factory.

Shipments of large TFT LCD flat panels fell in June 2010 by 2.1 percent as manufacturers took steps to prepare for the second half of the year.

According to market research company Displaybank, shipments amounted to 57.20 million units with revenues amounting to $6.96 billion. But even though there was a decline in shipments, Displaybank said that LCD TV shipments rose 1.7 percent to amount to 17.56 million units.

That’s a record shipment of LCD TV units. At the same time LCD monitors amounted to 17.97 million units, while notebooks dropped by 3.3 percent, month on month to 20.70 million units. The following graph, courtesy of Displaybank, shows the monthly trends in the market.

In geographical terms, South Korea had 47.6 percent market share, followed by Taiwan with 41.3 percent share.

LG Display held the pole position at 24.8 percent market share, followed by Samsung – yet the latter was the leader in terms of revenue.

Senior analyst Ricky Park said the declines on both price and shipments was prompted primarily by TV manufacturers operating a stable inventory strategy and concerns about the economy slowing down in the second half of this year.

AU Optronics, its American subsidiary and six of its executives have been indicted in the US for taking part in a cunning scheme to fix prices on LCD display panels.

According to the US Justice Department, the indictments are just the latest move in an continuing antitrust investigation into the LCD market

It looks like the rot went all the way to the top. Amongst those facing charges are top AU Optronics executives and the outfit’s president, Lai-Juh Chen.

According to papers shown to the court AU Optronics participated in a world-wide LCD price-fixing conspiracy from 2001 to 2006, by which time the market for LCD panels was $70 billion.

Apple, Dell, and HP were all hit by the price fixing scam, the DoJ said. It is not clear how much cash they had to pay because of the scam.

Prosecutors alleged that AU Optronics officials would meet up with competing LCD makers at hotels, restaurants and cafes in Taipei. Over a couple of drinks, perhaps a dancing girl or two, they would fix LCD prices and monitor and enforce them.

Information on LCD production, shipping, supply and demand was shared at those meetings, prosecutors alleged.

Apparently companies involved in the meetings became increasingly worried about being caught by their customers. They decided it would be a good idea to quit meeting in groups and instead instructed their lower-level employees to conduct the information exchanges.

Employees at the company’s US based subsidiary in Houston were told to discuss and confirm pricing arrangements with other LCD makers in the Land of the Free.

Six other companies have pleaded guilty to fixing prices and have paid criminal fines totalling more than $860 million.These include LG Display, Sharp, Chunghwa Picture Tubes, Seiko Epson, Hitachi and Chi Mei Optoelectronics.

More than 17 executives from LCD companies have been charged in the investigation. The first charges in the case were announced in 2008.

AU Optronics, based in the Hsinchu science park in Taiwan said that it will defend itself against the charges. It issued this statement: ” AUO has cooperated with the DOJ and other authorities in their investigations of the TFT-LCD industry since they began in December of 2006 and is disappointed with the DOJ’s action today.

“When institutions are confronted with allegations of wrongdoing, it is tempting to look for someone to blame, even its own managers or employees. Regardless of what others may do, that is not the way AUO does business and is not the path it chooses now.

“AUO believes the facts of the case do not warrant such charges, as shown, among others, by the intense competition within the industry which has benefited consumers as shown by the steep decline in prices over the years for TFT-LCD panels.”